NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
6. Preliminary and Interim Relief 6.1 Types of Relief
around a single arbitral seat rather than a supervisory jurisdiction detached from the seat. The Act also does not recognise the concept of an emergency arbitrator. This is regarded as a significant gap by comparison with the 2006 amendments to the UNCITRAL Model Law. Reform proposals under dis - cussion following the 2025 amendment include: • express provision for both tribunal-ordered and court-ordered interim measures, modelled more closely on the Model Law, and • institutional emergency-arbitrator procedures to be adopted by NEPCA. 6.3 Security for Costs The Arbitration Act does not contain an express, free - standing “security for costs” mechanism analogous to those found in many international rules. Nepali legisla - tion is generally silent on cost allocation and security, leaving the matter to be addressed by the arbitration agreement or by the tribunal. In practice, security-related orders are made under the two general tribunal powers: • the Section 21 (1)(d) power to require a bank guar - antee or other security from a party that is most commonly a foreign respondent where there is a risk an eventual award would not be satisfied (see 6.1 Types of Relief ); and • the general power under Sections 35 and 36 to fix and require advance payment of its own remunera - tion and the costs of the arbitration. There is no reported practice of the ordinary courts making security-for-costs orders in support of a pend - ing arbitration.
Nepali arbitral tribunals may grant preliminary and interim relief. Section 21 (1)(g) of the Arbitration Act expressly empowers the arbitrator to issue prelimi - nary, interim or interlocutory orders, or to make a con - ditional decision, on any matter connected with the dispute at a party’s request. The Act also provides for specific categories of interim measure: • security against non-enforcement – under Section 21 (1)(d), the tribunal may require a bank guarantee or other security where a party is a foreign national and there is a risk that any eventual award would not be enforceable against it; and • preservation of perishable property – under Section 21 (1)(e), the tribunal may order the sale of perish - able or depreciating property connected with the dispute and hold the proceeds on deposit. Such orders are treated as binding directions of the tri - bunal rather than as merely recommendatory. A party dissatisfied with an interim order under Section 21 (1) (g) may appeal to the High Court within 15 days; the High Court’s decision on that appeal is final (Section 21 (2)). The High Court must ordinarily dispose of such appeal within 30 days from the date of filing, under Rule 9 (4) of the Arbitration (Court Procedure) Rules. 6.2 Role of Courts The ordinary courts play a supporting, rather than con - current, role in interim relief. Section 23 of the Arbitra - tion Act allows a tribunal, on its own initiative or on a party’s request, to seek the District Court’s assistance in examining evidence. This assistance can extend to compelling attendance or production in support of measures the tribunal itself cannot enforce directly. Beyond this evidentiary-assistance function, and the Section 21 (2) appellate review of a tribunal’s own interim order (see 6.1 Types of Relief ), the Arbitration Act does not expressly empower the courts to grant free-standing interim relief in aid of Nepal-seated arbi - trations. The Act is silent on interim relief in aid of foreign-seated arbitrations, reflecting the Act’s design
7. Procedure 7.1 Governing Rules
Procedure is governed, in the first instance, by what - ever the parties have agreed. This may include insti - tutional rules such as NEPCA’s Arbitration Rules, or to the UNCITRAL Arbitration Rules, with the latter commonly incorporated for FITTA-governed foreign
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